Sensex @50,000: Markets give nearly 100% return in just 10 months2 min read . Updated: 21 Jan 2021, 10:40 AM IST
- From its March lows of 25,638, Sensex has nearly doubled in value in just 10 months
- Nifty was firm above 14,700
Indian stock market benchmark Sensex today scaled new highs, hitting 50,000 for the first time. Sensex was up 0.5% to 50,050. From its March lows of 25638, Sensex has nearly doubled in value in about 10 months. Nifty also rose to a new high and was also firm over 14,700. Asian stocks rose to new record highs today, tracking overnight gains on Wall Street as investors hoped for more economic stimulus from newly inaugurated US President Joe Biden to offset damage wreaked by the COVID-19 pandemic.
"The smooth transition in the US and President Biden's healing speech lifted the US markets to record highs. This feel-good factor is likely to spread to other markets too. FII inflows which had declined a bit during the last few days, have again turned strong going above ₹2200 crore on Wednesday. Apart from robust FII inflows, another major factor supporting the rally is the impressive corporate results which started in Q2 and continue in Q3," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
"The rally in stock markets, which is global, has been triggered by the massive liquidity injection by the central banks. This ultra-loose monetary policy of massive liquidity injection and historically low-interest rates is the response to the severe recession caused by the pandemic. While enjoying this bull run, investors should not be carried away by the euphoria. At high levels, markets are vulnerable to corrections," he added.
Geojit Financial Services in a note said that "the move towards 15000-15200 is in play. A slippage past 14,560 diminish the upside prospects, but it may take a break of 14460/40 for downsides to gain momentum."
Joseph Thomas, head of research at Emkay Wealth Management, says "the liquidity expansion by the central bank and the ample FII driven liquidity, a V-shaped recovery of growth aided by the discovery of vaccine, and most recently the change of guard in US have been some of the factors propelling markets higher and higher."
However, as the Sensex crosses the 50,000, "the valuations do look stretched. The valuations are a function of earnings and earnings not coming through remains the key risk at the current juncture," he added.
Today the US dollar is weak against emerging market and commodity currencies and overall global risk sentiment is upbeat, says Abhishek Goenka, Founder and CEO, IFA Global.
"Joe Biden's comments over the next few days on foreign policy, fiscal stimulus and management of ongoing coronavirus-led health crisis will be closely tracked. US weekly jobless claims are due today," said Abhishek Goenka, Founder and CEO, IFA Global.
Reliance Industries shares today rose 2% after market regulator SEBI gave a go-ahead on Wednesday to Future Group's scheme of arrangement and sale of assets to Reliance, based on which the Bombay Stock Exchange also granted its "no adverse observation" report to the ₹24,713-crore deal.